Emergency Covid loans carry high mis-selling risk, banks fear

Rapid roll-out of government schemes raises legal fears over inequitable client treatment

The emergency loans and relief packages being rolled out to firms and individuals affected by the coronavirus lockdown could come with a heavy price for banks: the risk of fines and lawsuits if they offer them to customers inequitably.

During ordinary times, banks are required to rigorously assess whether new loan products meet client suitability criteria – chiefly, whether a customer actually needs the product, can afford it and that it is offered on a nondiscriminatory basis.

But the